GUIDEBOOK TO SUCCESS

Most successful club owners learned this a long time ago, “Businesses need to adapt, evolve and grow or they die,” says Dan Horan, owner/operator of the Hatfield Athletic Club in Hatfield, PA. “You can't just stay the same and expect your business to remain level. You either grow or you die.”

This doesn't mean that you have to jump on every new trend and hope it's not a “flash in the pan.” However, you do have to be aware of every new potential opportunity and at least consider it. “The most important thing is that you always need to be looking for new ideas, new programs and new equipment,” continues Horan. “You don't always have to implement everything, but you at least have to research it to see if it makes sense for you and if it will help you grow your business.”

Here are what some of the experts are seeing these days in terms of changes and the opportunities that these changes may hold for your business.

PROGRAM EXPANSION

“We have been through two years of tough economic times, especially in Silicon Valley and San Francisco,” admits Jill Kinney, the founder and also the director of business development for Club One in San Francisco, which has clubs located in 10 states. “This has caused us to spend more time analyzing our markets and our profitability.” The company learned quite a bit. For one, the average age of its members is 43, which is older than some other clubs. Average member income is about $120,000 a year.

“Most of our members have been involved in health clubs for a number of years, so these are not the deconditioned group,” she continues. They have been cross-training for a number of years (cardiovascular exercise, strength training, flexibility), and moving through a number of different areas of the club.

More recently, though, the company has been finding that its members are becoming much more interested in specialized exercise routines, such as yoga, Pilates and martial arts.

“When they begin to limit themselves to these specialized programs, they want only the very best instructors, and they also want a facility that is perfectly designed for that particular use,” states Kinney.

She admits that this is creating a dilemma for Club One. “Most of our facilities weren't designed with specialized rooms for martial arts or yoga,” she explains. As a result, now, when it builds new clubs and renovates existing ones, it is building more group exercise studios and specialized studios. As such, the facility will have a studio for martial arts, one for Pilates, one for yoga and then one for general exercise.

“This has also caused us to hire a much larger percentage of our employees in the area of group fitness and also those who are specialists in delivering the programs that people want,” continues Kinney. At the same time, Club One is training its existing staff to be understanding and accepting of everyone's different needs.

“One way we do this is to get them involved in these specialized programs, and a lot of them end up getting hooked on them, too,” she notes.

As a result of expanding into specialized programs, Club One now finds itself competing with what Kinney calls the “mom and pop yoga studios.” “In addition, we are seeing our personal training revenues dip. They are being surpassed by the specialized classes.”

The trend is creating a whole new atmosphere in the clubs, according to Kinney. “Member motivation seems to be different than it was in the past,” she explains. “Instead of coming in on their own and hopping on a treadmill for an hour, people seem to like the idea of meeting in groups on a regular basis, getting to know each other, and having music play in the background.”

In other words, Kinney is finding that more and more of today's club members seem to be looking for something more spiritual and for ways of feeling better, rather than just looking good.

ALONG COMES WELLNESS

While specific add-on programs such as yoga and martial arts are gaining popularity, they are often being completely overshadowed by a much larger and more significant trend — the increasing demand among members and prospects for wellness programs.

“We started out as a fitness club, then added a wellness component, and this has really done a lot for us,” states Horan. “We can even do physical exams; we have a nurse practitioner on staff under the supervision of an M.D.”

Wellness programs have the ability to attract huge numbers of new members, among them the generally deconditioned, the overweight, seniors and boomers, and even youth.

Deconditioned

“I think the industry needs to do a lot more to attract deconditioned people,” emphasizes Annette Lang, owner of Annette Lang Education Systems in Brooklyn, NY. “It almost takes a brave marketing team to advertise to people who don't feel they're attractive enough or in good enough shape to even walk in the door.” She poses the following question to club owners: Do your ads feature the kind of people you want to attract (the deconditioned), or are you always trying to attract the same group of conditioned people who go from one health club to another?

“You need to offer programs that target specific needs that these people may have, such as back problems, foot/ankle programs, etc.,” she states. “Then, once you get these people in, make sure your staff is trained to treat them well. Your people shouldn't be dressed in ‘over the top’ outfits and spend all their time looking at themselves in mirrors. You need to create a total environment that makes deconditioned people feel comfortable.”

The overweight

“If a club isn't offering a weight loss program, it will really find itself in trouble,” challenges Casey Conrad, CEO of Healthy Inspirations in Wakefield, RI. “With 64.5 percent of Americans obese or overweight, this is a huge problem, literally and figuratively. Yet, only 12.8 percent of Americans are members of health clubs. This is a huge gap.” It also represents a huge opportunity for the industry, if they finally take it to heart.

Seniors and Baby Boomers

“We have a whole range of senior programs,” reports Club One's Kinney. “We used to just offer senior fitness, which was very general. Now we offer yoga for seniors, aquatics for seniors, martial arts for seniors, etc.”

While Conrad also sees opportunities for reaching out to seniors, she sees even more for reaching out to the generation just below them — the Baby Boomers. “Programs for advanced age issues are becoming popular, such as those for arthritis,” she states. “However, wellness programs that speak to issues affecting baby boomers are becoming even more popular.”

In fact, according to Conrad, the biggest area of membership growth in health clubs in recent years is the Baby Boomers. “The 18-to 24-year-old segment of the market is declining,” she points out. In sum, health clubs are in an ideal position to lead the revolution for health. “Baby Boomers want to find ways to try to delay the onset of aging,” continues Conrad.

Youth

There is also a wellness opportunity among the youth. “The Centers for Disease Control reports that 42 percent of teenage boys and 46 percent of teenage girls are overweight,” states Conrad. As such, she believes that clubs should expand weight loss programs to the whole family, not just adults.

“In sum, the more successful clubs are those that are becoming wellness-oriented, family-oriented and community-oriented, and pulling away from ‘gym membership’ aspect,” she states.

TARGETING YOUTH

While wellness programs can target certain youth, there are ways to attract other young people who aren't directly interested in wellness. The Hatfield Athletic Club, for example, is currently adding a number of new offerings, such as dance, gymnastics, martial arts, and boxing, all aimed primarily at young people.

“These are brand new markets for us, and we are attracting parents and their children,” explains Horan. There is one benefit. “These parents are spending a lot more money than they would for just a health club membership.”

Horan is also finding that there is a strong increase in the demand for sports-specific fitness, especially for kids, such as fitness training for baseball and hockey. “Parents are paying a real good buck to have supervised exercise programs for their kids,” he explains.

MARKETING

Of course, if you have the best programs in the world but no way to get the word out to people, you're not helping yourself (or potential members) very much. How can you attract new members? There are some low-tech ways and some high-tech ways. A lot of clubs are offering 6-, 8-, and 12-week programs that people can attend without having to be members, according to Conrad. Some even offer free one-time seminars that are open to the public. “What a concept!” she exclaims. “Obviously, a lot of these people are going to end up becoming members.” In addition, advertising for these events is often free. That is, instead of having to pay for newspaper ads, you can publicize your free seminars via press releases to your local newspapers, and maybe even radio and TV stations.

Check out some high-tech options.

“Our customer service management systems are changing dramatically,” states Club One's Kinney. “We used to have a difficult time finding software that could adequately keep track of prospects and member interests and involvement.” These days, though, she finds that there “is quite a bit available on the market. “This is allowing us to be much more contemporary in our sales and marketing tactics,” she adds.

Club owners will absolutely need to get more involved with technology for sales and marketing, emphasizes Conrad. The reason is that traditional advertising (newspapers and direct mail) just isn't working the way it once did. “We used to be able to put an ad in the paper and get 80 phone calls the first day,” she recalls. “These days, though, people are oversaturated with marketing, so that doesn't work.”

Conrad is excited about the idea of Internet marketing, in addition to e-mail messages to guests and former members. This is not only more effective in terms of generating response, but it also drives down the cost of marketing. For example, there are some companies that create electronic newsletters on health and fitness, and they can send these out to your target markets with your name attached to them. “As such, make sure that you collect e-mail addresses from your clients and your prospects,” she advises.

Your club management software should also be able to store these e-mail addresses and interface with your Internet server to send out electronic newsletters and promotions.

Just as important, your system should be able to filter. For example, you may want to target an e-mail specifically to people over 50 who are interested in a specific program. Conrad emphasizes that this target marketing is important. “If you send general messages to all of your members and prospects, it will be difficult for these people not to start hating you, because people hate getting ‘crap’ e-mails,” she explains. “However, if you have a back problem, and once a month I send you information on exercises you can do away from the club to help you strengthen your back, you will really appreciate that.”

RETENTION STRATEGIES

The experienced club owner knows that it makes a lot more sense to try to keep existing members than to spend all of their efforts trying to attract new ones as they continue to lose existing members. One owner who works hard at retention is Horan, and his efforts are working.

“We have a 75 percent retention rate, compared to the 40 percent average,” he states. While the club uses the traditional “soft” retention strategies (friendly staff, thank you cards, phone calls, 12-week orientation programs, etc.), Horan finds that much of the “latest and greatest” equipment keeps members coming back.

One of these is FitLinxx, which is computerized equipment that explains to the user what to do, how many to do, calculates performance, and provides feedback on what the person has done. “It is a big investment, but we've made it upon the retention end,” reports Horan.

Another is CardioVision, which is a 13-inch flat screen television on each one of the cardiovascular machines. Besides 80 channels of television, each unit has a DVD, CD and MP3 component. “This provides entertainment for people while they're working out,” he explains.

In the women's wellness center, Horan has added hydraulic equipment, which is a small circuit using hydraulic resistance. What is unique is that there is no weight stack, and each piece does two exercises at the same time. “In this way, women can do 12 exercises using only six pieces of equipment,” he explains.

PERSPECTIVE

Horan sums up the need to look toward expansion, “If you continue to try to cater only to the ‘gym rats’ of the world, you won't survive, because there just aren't enough of them anymore,” he states.

Annette Lang also offers some perspective on looking toward the future. Her message: Expand, but not at the expense of the basics.

“While the demand for functional training is increasing, and a lot of people are getting away from machines, weight training is still very valuable,” she states. “As such, people shouldn't get caught up in just one system. You should continue to offer people various ways to exercise.”

She adds, “Don't get so caught up in current popular programs that you forget to offer a variety of programs.” She has seen some owners who have gotten so caught up in offering yoga that they forget to offer classes for people who don't like yoga. “Others get so involved in offering advanced classes that people who want to learn the basics end up being left out,” she adds. “The beginning people still need our help.”

And finally, if big changes seem too risky, consider smaller ones to start. Lang offers one such suggestion. “Small group personal training with four to six clients is becoming more and more popular,” she states. “A lot of people don't want to pay for one-on-one training. The demand for this is increasing, and it is still an untapped opportunity.”